Fine for ignoring signs of Bernard Madoff's Ponzi scheme will take JP Morgan's
penalties to $22.2bn, more than a fifth of its revenues

JP Morgan is set for another $2bn in fines, putting the bank on track to pay out $22.2bn - more than a fifth of its revenues - in fines and settlements in the current financial year.

Regulators and federal prosecutors in the US are preparing to fine the investment bank around $2bn, after it allegedly ignored signs of Bernie Madoff’s Ponzi scheme. The settlement could be finalised as early as Tuesday, according to reports.

The penalty is the latest in a spate of expensive punishments to be levied against JP Morgan, which is America’s largest bank and was the only one to weather the financial downturn without going into the red.

In October, the US Department of Justice fined JP Morgan a record $13bn to settle a slew of different lawsuits, pushing the bank to its first quarterly loss under chairman and chief executive Jamie Dimon.

The bank has also paid out $1.2bn in fines over the 2012 “London Whale” scandal, in which a series of high risk trades went wrong and put a $6.2bn hole in the company’s balance sheet.

Initially, regulators billed the bank $920m last September, including a £138m by the UK’s Financial Conduct Authority. However, America’s Commodity Futures Trading Commission (CFTC) added a further $100m fine the following month, tipping the total penalty over the $1bn mark.

In the past few months, JP Morgan has also paid out $400m to the Federal Energy Regulatory Commission for alleged manipulation of the energy markets, and $1.1bn to the Federal Housing Finance Agency for mis-representing the quality of some mortgages in the run-up to the financial collapse. The latter fine was part of a larger $5.1bn settlement, but $4bn of that figure fell under the DoJ’s $13bn catch-all deal.

Also on JP Morgan’s charge sheet is a $4.5bn settlement with investors, headed by the lawyer Kathy Patrick, who lost money on mortgage-backed securities before the collapse of the US housing market.

The bank has already set aside a $23bn fund for its tally of fines. However, the penalties will still take a painful bite out of JP Morgan’s annual revenues, which are expected to weigh in at $99bn when the bank reports its fourth-quarter results next week.